Key facts
- Global markets stabilized with oil prices steadying and bond yields easing.
- U.S. Treasury yields fell from recent highs, while European yields were pressured by high natural gas prices.
- The Japanese yen strengthened on speculation of a Bank of Japan rate hike.
- Broadcom's earnings met expectations, but its near-term outlook was weaker than anticipated.
- U.S. private sector job growth in August, as measured by ADP, was slightly below forecasts.
Global markets experienced a period of calm as oil prices stabilized and bond yields retreated from recent highs. While no significant breakthroughs occurred in the U.S.-Iran standoff in the Gulf, President Donald Trump suggested a limited duration for recent attacks, with aides seeking to de-escalate tensions ahead of the U.S. midterm elections.
U.S. Treasury yields eased from multi-year highs, though European yields remained under pressure due to a sharp increase in natural gas prices reaching three-year highs before the winter season. Asian stock markets showed mixed performance, while Wall Street futures indicated a positive opening after U.S. indexes closed higher on Wednesday.
The Japanese yen saw a notable surge, with market participants suspecting intervention to support the currency. However, speculation about a potential Bank of Japan interest rate hike, possibly larger than usual, also contributed to the yen's strength.
Market attention is shifting towards upcoming U.S. labor market data. The ADP report on private sector payrolls for August came in slightly below expectations, preceding the broader jobs report scheduled for release.
In corporate news, Broadcom's latest earnings surpassed expectations, but its fourth-quarter outlook was somewhat disappointing. Despite this, the company forecast robust AI chip sales for the next two years, indicating continued demand for AI infrastructure. However, Broadcom shares fell in extended trading, underperforming rivals amid concerns about AI spending and increased competition.